By Polya Lesova, MarketWatch
LONDON (MarketWatch) ? Most European stock markets fell Friday as Italy?s 10-year government bond yield surged above 7%, rekindling fears about the region?s sovereign-debt crisis and overshadowing better-than-expected U.S. jobs data.
The pan-European Stoxx 600 index /quotes/zigman/2380150 XX:SXXP +0.06% ?closed marginally higher, but many national benchmarks finished lower. The Stoxx 600 gained less than 0.1% to end at 247.53, bringing its weekly gains to 1.2%.
/quotes/zigman/2380150 SXXP 247.53, +0.14, +0.06%Debt worries once again soured sentiment across most of Europe, this time ahead of government bond sales for both Spain and Italy next week.
The 10-year Italian bond /quotes/zigman/4869096/delayed IT:10YR_ITA -0.03% ?saw its yield rise 16 basis points to 7.11% in late trade, even as the European Central Bank reportedly intervened in the secondary markets earlier to buy Spanish and Italian bonds. A yield of more than 7% is generally viewed as unsustainable for government borrowers over the long run.
In Italy, the FTSE MIB stock index /quotes/zigman/1482176 XX:FTSEMIB -0.82% ?dropped 0.8% to 14,645.64, as shares of UniCredit SpA /quotes/zigman/7909864 IT:UCG -11.12% ?slumped 11.1%, bringing the bank?s weekly decline to 38%. UniCredit spooked investors Wednesday when it said it will sell shares at a massive discount.
Concerns about the debt crisis overshadowed data showing that the U.S. economy added 200,000 jobs in December and that the unemployment rate fell to 8.5% to end 2011. The figures were better than economists had expected. Read more about December employment report.
Hungary on the brink
Under financial pressure Hungary signals that it?s open to negotiating a loan with the International Monetary Fund. But the government could sell 12-month treasury bills only at a very expensive average yield of nearly 10%.
In Germany, the DAX 30 index /quotes/zigman/2380246 DX:DAX -0.62% ?fell 0.6% to 6,057.92, as shares of Deutsche Bank AG /quotes/zigman/207036 DE:DBK -4.78% ? /quotes/zigman/207002/quotes/nls/db DB -5.02% ?dropped 3.5%.
In France, the CAC 40 index /quotes/zigman/3173214 FR:PX1 -0.24% ?slipped 0.2% to 3,137.36, with bank Societe Generale /quotes/zigman/167380 FR:GLE -3.20% ?trading down 3.2%. Shares of Publicis Groupe SA /quotes/zigman/135209 FR:PUB +3.47% climbed 3.5%, however, after Morgan Stanley upgraded the advertising company to equal weight from underweight.
FTSE 100 gains
In London, Mitchells & Butlers PLC /quotes/zigman/430448 UK:MAB +8.70% ?was one of the top gainers in the Stoxx 600, its shares rallying 8.7% after Morgan Stanley upgraded the restaurant operator to overweight from equal weight.
The U.K.?s FTSE 100 index /quotes/zigman/3173262 UK:UKX +0.45% ?gained 0.5% to 5,649.68, buoyed by gains for Vodafone Group PLC /quotes/zigman/421253 UK:VOD +1.24% ? /quotes/zigman/101873/quotes/nls/vod VOD +0.45% , shares of which climbed 1.2%. Goldman Sachs upgraded the mobile operator to buy from neutral, saying that it sees a potential total return of 55% over the next two years.
In the media sector, ITV PLC /quotes/zigman/337392 UK:ITV +2.74% ?rose 2.7% after Morgan Stanley raised its rating on the stock from equalweight to overweight.
British Sky Broadcasting Group PLC /quotes/zigman/143786 UK:BSY -1.32% , meanwhile, fell 1.3%. Morgan Stanley cut its rating from overweight to equalweight, citing ?fears of poor news flow.?
Broker action also affected the U.K. asset-management sector: Man Group PLC /quotes/zigman/487128 UK:EMG -8.37% ?dropped 8.4% to 113 pence after Credit Suisse reduced its target price on the hedge-fund manager from 215 pence to 175 pence, to reflect lowered expectations for assets under management, but retained an outperform rating.
Also in the sector, Ashmore Group PLC /quotes/zigman/433475 UK:ASHM -2.90% ?was downgraded to neutral from outperform by Credit Suisse. Its shares dropped 2.9%.
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Polya Lesova is chief of MarketWatch?s London bureau.
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